Proving again that earnings drive the market and Kosovo's impact is ultimately as contained as the campaign itself, stock proxies stormed higher today thanks to some positive developments on the profit front.

First, rumors of preannouncements from bellwethers such as

Compaq

(CPQ)

and

Intel

(INTC) - Get Report

have (thus far) proven more akin to

Snoopy's

vulture than the albatross some feared.

Second, the hint of optimism

3Com

(COMS)

initiated

Tuesday night was extended by

Micron Technology

(MU) - Get Report

last night and then unsheathed this morning by

Morgan Stanley Dean Witter

(MWD)

. Additionally,

Caterpillar

(CAT) - Get Report

and

Maytag

(MYG)

each made positive comments about earnings prospects.

Sure, 3Com bested lowered estimates and Micron fell 8.8% today, but they mattered little to the big picture, which looked downright rosy after four trading days where the action was mixed at best.

The

Dow Jones Industrial Average

rose as high as 9841.94 late in the session before closing up 169.55, or 1.8%, to 9836.39.

Procter & Gamble

(PG) - Get Report

and

American Express

(AXP) - Get Report

led Dow gainers, while Caterpillar and

Wal-Mart

(WMT) - Get Report

lent solid support.

Tech proxies were again the best performers, thanks both to a retrenchment of earning worries and a sense that recent selling created opportunities.

The

Nasdaq Composite Index

rose 69.15, or 2.9%, to 2434.43, in the ninth-biggest point gain in its history.

Microsoft

(MSFT) - Get Report

led the Comp, rising 5.1% to a new high of 179 15/16 amid anticipation it will settle its antitrust case with the

Justice Department

.

The rally 'sure proves that the momentum players just go on vacation from time to time but they ain't dead yet,' a veteran trader quipped.

Most other tech bellwethers notched sharp gains, notable exceptions being

Intel

(INTC) - Get Report

Dell

(DELL) - Get Report

, and

Gateway

(GTW)

. Still, the

Nasdaq 100

rose 3.5% and the

Morgan Stanley High-Tech 35

gained 3%.

Despite Intel's and Micron's lassitude, the

Philadelphia Stock Exchange Semiconductor

rose 2.7%. The SOX was paced by

Texas Instruments

(TXN) - Get Report

and chip equipment makers such as

KLA-Tencor

(KLAC) - Get Report

,

Applied Materials

(AMAT) - Get Report

and

Teradyne

(TER) - Get Report

.

Internet names also scurried higher, sparked by a string of new buy ratings from

NationsBanc Montgomery Securities'

Alan Braverman.

TheStreet.com Internet Sector

index rose 33.79, or 5.7%, to 627.90 while

TheStreet.com E-Commerce Index

gained 4.53, or 4.2%, to 112.13.

The

S&P 500

rose 21.33, or 1.7%, to 1289.92 as transports and retailers joined technology on the upswing. Additionally, brokerage firms soared in reaction to Morgan Stanley's blockbuster earnings report. Morgan rose 5.8%,

Donaldson Lufkin & Jenrette

(DLJ)

gained 8.2% and

Lehman Brothers

(LEH)

rose 6.8%, leading the

American Stock Exchange Broker/Dealer Index

higher by 5.8%.

Even small-caps joined the upturn, reflecting solidly positive (for a change) market internals; the

Russell 2000

gained 8.59, or 2.2%, to 392.99.

In

New York Stock Exchange

trading, 784.2 million shares were exchanged while gainers led 1,887 to 1,048. In

Nasdaq Stock Market

activity 942.5 million shares were exchanged while gainers led 2,363 to 1,543. Still, new 52-week lows bested new highs 73 to 20 on the Big Board and by 97 to 59 in over-the-counter trading.

"I think a lot of the bargain hunters stepped into the market today," said Conley Turner, equity analyst at

Wall Street Strategies

, noting oversold conditions in semiconductor and airlines stocks. "Also, there was an inordinate amount of brokerage upgrades today, plus Morgan Stanley's earnings. These factors really added to positive investor sentiment. That's why a lot of money came off the sidelines into what investors perceived to be oversold issues."

Turner said positive momentum was also evinced by secondary names such as

Concentric Network

(CNCX)

, up 9%, and

Quintiles Transnational

(QTRN)

, which gained 7.7%.

However, "while we have this rebound today, whether or not this can be sustained is another question," the analyst said. "The concern of earnings going forward is still out there. We feel positive in the long term but see continued volatility in the short term. This is still a traders' market."

On the Other Hand

Still, not all were impressed with the market's performance. The rogue's humor of trading desks resulted in the following quip from one market veteran: "Up 170! Tech fever, catch it!" he said. "Proof again that 'the buyers are higher.' It sure proves that the momentum players just go on vacation from time to time but they ain't dead yet."

More serious skeptics noted the lack of breakout volume, the sluggishness of tech leaders Dell and Intel, and the uptick in oil prices and subsequent bond-market reversal.

The price of the 30-year Treasury bond fell 23/32 to 95 4/32, its yield rising to 5.59%.

Others expressed chagrin the market did not continue the washout experienced

Tuesday.

"Even before we started the climb to 10,000, the market was overvalued and there was too much optimism," said Hugh Johnson, chief investment officer at

First Albany

. "It looked as though we were in the process of eliminating that but the market has to go down further to eliminate that. Then perhaps we can have a more orderly assault on 10,000."

Johnson, who has been espousing the need for a defensive stance since

Feb. 25 (at least), said he was not surprised by the market's performance, but a bit disappointed.

"I don't know if I'm forecasting or hoping for more of a correction, but it's one of the two," he said. "It would be very healthy."

Among other indices, the

Dow Jones Transportation Average

rose 83.05, or 2.6%, to 3289.70; the

Dow Jones Utility Average

slid 0.66, or 0.2%, to 304.39; and the

American Stock Exchange Composite Index

rose 8.80, or 1.3%, to 712.40.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

rose 66.21, or 1%, to 6593.52 and the

Mexican Stock Exchange IPC Index

edged up 9.71 to 4829.20.

Thursday's Company Report

By Heather Moore
Staff Reporter

(

Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.

)

As noted above, Micron Technology skidded 4 9/16, or 8.8%, to 47 7/16 even after last night posting second-quarter operating earnings of 12 cents a share, excluding a 3-cent writedown for flat panel display assets and a charge for consolidation of PC operations in Japan. Net income came in at 8 cents. The 19-analyst view called for a profit of 1 cent a share vs. the year-ago loss of 24 cents.

Meanwhile, Morgan Stanley Dean Witter behaved as it was supposed to -- and rallied after a positive earnings release. The company hopped up 5 1/2, or 5.6%, to 103 7/8 after posting first-quarter earnings of $1.76 a share, blowing away the 12-analyst estimate of $1.34 and moving up from the year-ago $1.10.

Mergers, acquisitions and joint ventures

eBay

(EBAY) - Get Report

lifted 14 1/8, or 9.7%, to 159 3/8 after setting a four-year marketing pact with

America Online

(AOL)

under which it will pay AOL $75 million. AOL rose 9 3/8, or 8%, to 126 1/2. Separately, eBay filed with regulators for a secondary offering of 6.5 million shares.

Still elsewhere in the sector, NationsBanc Montgomery Securities initiated coverage of a handful of Internet companies with buy ratings, including AOL;

Amazon.com

(AMZN) - Get Report

, which jumped 16 1/8, or 13%, to 139 7/8; and

Yahoo!

(YHOO)

, which jumped 18 1/2, or 11.5%, to 179.

First Union

(FTU)

tacked on 1 to 54 3/16 on news that it and

Everen Capital

(EVR) - Get Report

plan to form an asset-management joint venture, merging the

Evergreen

and

Mentor

groups of mutual funds. Everen Capital rose 1/16 to 20 1/8.

GLC

(GLXW)

sprouted up 3 3/4, or 43.5%, to 12 1/2 after its

GalaxiWorld

unit and

Playboy's

(PLAA)

Playboy Online

unit agreed to launch a new casino within the Playboy.com Web site. Playboy climbed 1 9/16, or 6.7%, to 24 3/4.

Interim Services

(IS)

shaved off 1 13/16, or 10.2%, to 16 after agreeing to acquire

Norrell

(NRL)

in a stock and cash deal value at $553 million. Norrell picked up 13/16, or 6.4%, to 13 7/16.

Credit Suisse First Boston

started coverage on Interim with a strong buy.

Mutual Savings Bank

(MSBK)

flew 2 3/4, or 28.8%, to 12 5/16 after last night

Independent Bank

(IBCP) - Get Report

agreed to acquire the company in a stock swap valued at $14.60 a share. Mutual Savings shareholders will receive 0.8 of an Independent Bank share for each share held. Independent Bank slouched 13/16 to 17 9/16.

Northern States Power

(NSP) - Get Report

lowered 1 1/16 to 26 3/16 after agreeing to merge with

New Century Energies

(NCE)

in a stock swap. New Century dropped 2 3/16, or 5.7%, to an annual low of 36 1/2. New Century Energies shareholders will receive 1.55 shares of the merged company for each share held.

PaineWebber

lowered Northern States Power to neutral from attractive.

O'Sullivan Industries Holdings

(OSU)

grew 2 5/16, or 18.3%, to 14 15/16 after last night saying a senior management group made a proposal to buy the company. The company hired

Salomon Smith Barney

to explore and evaluate options.

Earnings/revenue reports and previews

Ames Department Stores

(AMES)

shot up 5 1/16, or 17.6%, to 34 after recording fourth-quarter earnings of $1.46 a share, topping both the five-analyst view of $1.35 and the year-ago $1.23.

Aztec Technology Partners

(AZTC)

tanked 1 13/16, or 47.5%, to an all-time low of 2 after last night warning it expects to report first-quarter earnings of 1 cent to 3 cents a share and 1999 earnings of 20 cents to 30 cents. The company cited tougher competition squeezing its margins, a slowdown on the cabling portion of its voice and data business unit and higher costs and one of its branches. Aztec also said it formed a strategic committee to find ways to boost its share price. A single-analyst view called for quarter earnings of 16 cents, vs. the year-ago 11 cents, and a three-analyst view called for full-year earnings of 65 cents, vs. the year-ago 60 cents.

Benton Oil

(BNO) - Get Report

excelled 3/8, or 10.3%, to 4 after last night reporting a fourth-quarter loss of 24 cents a share, 6 cents narrower than the five-analyst estimate but below the year-ago profit of 7 cents.

Blyth Industries

(BTH)

surged 2 7/16, or 10.8%, to 24 15/16 after recording fourth-quarter earnings of 45 cents a share, on target with the three-analyst forecast and a dime ahead of the year-ago figure.

ConAgra

(CAG) - Get Report

declined 2 11/16, or 9.1%, to 27 after posting third-quarter earnings of 36 cents a share, a penny above the 15-analyst outlook and higher than the year-ago 28 cents.

Core Laboratories

(CLB) - Get Report

stumbled 6 1/4, or 27%, to 16 15/16 after announcing fourth-quarter earnings of 18 cents a share, missing the two-analyst estimate of 30 cents and falling behind the year-ago 23 cents.

IBM

(IBM) - Get Report

added 1 13/16 to 171 5/16 after

The Wall Street Journal

said the company disclosed a pretax loss of nearly $1 billion from its PC business last year, prompting renewed calls for Big Blue to exit the PC market. Separately, IBM and

Telefonica de Espana

(TEF) - Get Report

announced a multiyear deal worth billions of dollars. Telefonica rose 2 3/4 to 132 1/4.

Marcus

(MCS) - Get Report

advanced 5/8, or 5.6%, to 11 7/8 after reporting third-quarter earnings of 2 cents a share, 6 cents below the four-analyst estimate and behind the year-ago 14 cents.

Maytag expanded 5 15/16, or 10.9%, to 60 1/4 after saying its first-quarter earnings will likely exceed current expectations and come in above 90 cents a share. The seven-analyst estimate calls for 81 cents vs. the year-ago 75 cents. The company attributed the new outlook to strong sales in higher margin items such as its

Hoover

upright vacuums and large

Jenn-Air

refrigerators.

Pediatrix

(PDX)

rocketed up 14 1/16, or 70.5%, to 34 after recording fourth-quarter earnings of 51 cents a share, 2 cents higher than the 12-analyst view and 11 cents above the year-ago figure.

Pharmacia & Upjohn

(PNU)

tacked on 1 3/8 to 59 1/2 after saying it sees double-digit sales growth in the first quarter and high single-digit sales growth for the year. The company also expects to meet double-digit earnings growth. A 14-analyst estimate calls for first-quarter earnings of 42 cents a share vs. the year-ago 36 cents, and an 18-analyst estimate calls for annual earnings of $1.82 vs. the year-ago $1.58.

Germany's

SAP

(SAP) - Get Report

picked up 1 9/16, or 6.3%, to 26 9/16 even after saying its first-quarter sales growth will fall short of its previous year-on-year forecast of 20% to 25%. For the full year, the company expects profits to exceed 1998 levels.

Morgan Stanley Dean Witter

lowered the stock to neutral from outperform and cut earnings estimates for 1999 and 2000.

United Road Services

(URSI)

plunged 5 5/32, or 48.5%, to an all-time low of 5 7/16 after warning its first-quarter earnings will fall below estimates and come in around 8 cents to 10 cents a share due to mild winter conditions. The two-analyst estimate called for a profit of 18 cents vs. the year-ago loss of 8 cents.

BancBoston Robertson Stephens

lowered the stock to buy from strong buy.

XL Capital

(XL)

slipped 1/2 to 56 3/4 after reporting first-quarter earnings of $1.12 a share, in line with the seven-analyst estimate of $1.12 and 1 cent above the year-ago figure.

Offerings and stock actions

Affiliated Computer Services

(ACS)

rallied up 4 1/4, or 11.7%, to 40 7/16 after postponing a 3.5 million-share secondary offering because of market conditions.

Brown Brothers Harriman

lifted the stock to short-term strong buy from buy and set a 12-month price target of 54 a share.

OneMain.com

(ONEM) - Get Report

soared 17 5/8, or 80.1%, to 39 9/16 after last night

BT Alex. Brown

priced its 8.5 million-share IPO top-range at $22 a share. The company is an Internet service provider offering services in secondary rural markets.

Analyst actions

Clorox

(CLX) - Get Report

jumped 7 15/16, or 7%, to 121 3/4 after Morgan Stanley Dean Witter upped the stock to outperform from neutral and set a price target of 133.

Exodus

(EXDS)

revved up 28 3/4, or 23.8%, to 150 after

ING Baring Furman Selz

began coverage with a buy.

Herman Miller

(MLHR) - Get Report

flew 7/8, or 5.2%, to 17 9/16 after

Merrill Lynch

raised it to near-term accumulate from neutral while maintaining its long-term buy.

PMC-Sierra

(PMCS)

lowered 1 15/16 to 73 1/2 after

Prudential Securities

initiated coverage at accumulate.

SCI Systems

(SCI) - Get Report

fell 5 1/4, or 14.8%, to 30 3/16 after Credit Suisse First Boston downgraded the stock to hold from strong buy and

Bear Stearns

dropped it to attractive from buy. The company issued a third-quarter profit warning yesterday, blaming economic weakness in Brazil.

Miscellany

Data Transmission Network

(DTLN)

climbed 5 15/16, or 36%, to 22 9/16 after last night saying Chairman and Chief Executive Roger R. Brodersen resigned as part of the reconstitution of its board.

Duramed Pharmaceuticals

(DRMD)

shot up 5 7/16, or 78.4%, to an annual high of 12 3/8 after late yesterday the

Food and Drug Administration

granted the company approval to market

Cenestin

, used to treat moderate to severe vasomotor symptoms related to menopause, such as hot flashes and night sweats.

Lechters

(LECH)

expanded 9/16, or 34.6%, to 2 7/32 after last night saying it will close 60 to 70 stores in fiscal 1999 and that it's considering selling products over the Internet. The company also reported fourth-quarter earnings of 27 cents a share, below both the two-analyst estimate of 46 cents and the year-ago 31 cents.

Qualcomm

(QCOM) - Get Report

surged 11 1/6, or 12.7%, to an all-time high of 98 7/16 after it and

Ericsson

(ERICY)

resolved their disputes on code division multiple access technology. The companies agreed to support a single global CDMA standard and Ericsson agreed to buy Qualcomm's terrestrial CDMA wireless infrastructure business. Ericsson, bouncing back from yesterday's profit warning, lifted 2 5/16, or 11%, to 23 5/16.

United Airlines

parent

UAL

(UAL) - Get Report

tacked on 3 5/16 to 76 13/16 after naming James E. Goodwin chairman and chief executive, effective in July. Goodwin, currently president and COO, will succeed Gerald Greenwald, who is retiring.